Chinese firms have been actively buying overseas assets, partly as a hedge against a weakening renminbi and a slowing economy, partly driven by a strong desire to acquire foreign brands and technology.
Health care is one sector where M&A activities are prevalent.
One of the biggest deals over the past year was Biostime’s A$1.3 billion (US$988 million) purchase of 83 percent of Swisse Wellness Group in September 2015. The company is a major Australian player in the vitamin, herbal and mineral supplements segment.
Other deals covered a wide range of companies, including medical equipment makers, genetic engineering firms, and even beauty treatment companies.
In the first half of this year, about a tenth of overseas M&As carried out by mainland firms involved healthcare, medical and pharmaceutical businesses, a Hong Kong Commercial Daily report says.
Mainland firms are making these acquisitions in the hope of bringing the advanced technology and products back to the home market to serve the rapidly aging population, the report notes.
Hungry for such assets, Chinese buyers are willing to pay 20 to 30 percent premium in general, or a price earnings ratio of about 30 to 40 times.
Meanwhile, they prefer to focus on mid-sized firms, which better fit their budgets and normally entail less regulatory resistance.
Mainland healthcare market is tipped to reach 10 trillion yuan (US$1.49 trillion) by 2020.
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